New Delhi, January 28: The government has directed every bank in India to set up a committee of senior officers to monitor progress of pending disciplinary and internal vigilance cases. The move is one of the several measures taken by the Ministry of Finance to protect commercial decision making by banks.
Delays in cases against officials for their alleged malpractices “adversely affects the morale of the employees and breeds inefficiencies in the system,” it said. It further asked the committee to frame timelines to reduce delays in deciding such cases.
The government has also delegated powers to the boards of Public Sector Banks (PSBs) to put in place a suitable mechanism for ensuring compliance of the various timelines laid down in the circulars by Reserve Bank of India (RBI) and Central Vigilance Commission.
Further, the government said that cases of fraud, involving public servants equivalent in rank to general managers and above, for all Non-Performing Asset (NPA) accounts exceeding Rs 50 crore are to be initially referred to the Advisory Board for Banking Frauds (ABBF) that will conduct first level examination.
Hence it has spared Managing Directors (MDs) and Chief Executive Officers (CEOs) of PSBs from their personal responsibility for compliance with various prescribed timelines.
Government’s release noted that these measures have been taken to protect honest commercial decisions taken by banks and distinguish between genuine commercial failures and culpability.